Bitcoin is fighting to maintain its Short-Term Holder (STH) cost basis to hedge against further market pressure following a 10% correction.

In its latest weekly report, blockchain analytics firm Glassnode noted that this STH cost basis currently sits at $62.5K. They confirmed that Bitcoin movements and investor behavior show resilience and vulnerability as BTC tries to stabilize around this important level.

Bitcoin Price Rebounds but Faces Market Pressure

After dropping into the $60K region at the beginning of October, Bitcoin bounced back to the $63K mark over the weekend, and eventually surpassed it on Monday. Glassnode data shows that this level syncs with the STH cost basis. 

For the uninitiated, the STH cost basis is an important zone for gauging the short-term health of the market. If Bitcoin fails to hold above it at $62.5K, recent buyers could come under intense pressure. 

At press time, Bitcoin currently trades for $62,443, slightly below the STH cost basis, and desperately looking to reclaim and maintain it. The price hovering near this level suggests the market is at a crossroads. 

However, according to Glassnode, the 26% drawdown from the highs above $73K this year is notable but not catastrophic. The report confirms that this slump is less deep than what BTC observed in past cycles.

Despite this, the past few months have presented some of the most bearish conditions since the time of the FTX implosion in the fourth quarter of 2022. This is possibly due to economic uncertainties and geopolitical tensions. Notably, Bitcoin is down 12% since April.

Bitcoin STHs in a Profitable Position

Notably, Short-Term Holders (STHs) are often crucial in determining near-term market action. These investors are currently in a profitable position, with the ratio of their supply in profit versus their supply in loss now at 1.2. 

At the same time, the STH-MVRV ratio, which measures the unrealized gains or losses of short-term holders, has bounced back after a dip in August. This indicates that new investors in the Bitcoin market are recording improved profitability. 

However, with gains accumulating, there is an increasing incentive for STHs to lock in profits, which could lead to selling pressure if Bitcoin struggles to maintain its current levels.

Price Levels Indicating Bitcoin’s Market Health

Meanwhile, Glassnode stressed that besides the $62.5K STH cost basis, two other figures are important in assessing market health. These are the True Market Mean, which stands at $47K, and the Active Investor Price, currently at $52.5K.

Bitcoin generally remained above these two levels throughout 2024, except for a brief dip below the Active Investor Price due to selling pressure in August. The fact that Bitcoin is above these support levels indicates that the market is still healthy and capable of weathering retracements.

The report also shows that speculative activity has decreased in the derivatives market. The weekly cost of leverage for long positions, which peaked at $120M during Bitcoin’s all-time high in March, has dropped to just $15.3M. 

American billionaire investor Tim Draper has speculated that Bitcoin will trade at $250,000 when the U.S. government sees the light regarding cryptocurrencies.

In an interview, the venture capitalist investor stated that Bitcoin will meet his $250,000 predictions when the regulatory impediments hindering the crypto industry are removed. He further blamed the U.S. SEC for scuffing the nascent sector and limiting its growth.

SEC Hindered $250,000 Price Prediction: Draper

Draper noted that his prediction that Bitcoin would trade at $250,000 would have materialized if not for the SEC’s iron-handed approach to the crypto sector.

For context, the VC investor asserted in 2018 that Bitcoin would trade at $250,000 in four years. This came after his earlier speculation that the asset would hit $10,000 by 2017 materialized.

However, two years after the deadline, the $250,000 prediction has yet to come to fruition, and Draper argues that this is because the SEC has hindered the sector’s growth. The American billionaire stated that the regulator uses outdated policies to scuffle innovation.

Notably, Draper’s $250,000 price prediction coincides with other analysts’ assertions. For instance, Standard Chartered’s head of digital asset research, Geoff Kendrick, stated that Bitcoin will trade at $200,000 by next year, regardless of the November election outcome.

Draper Urges US Government to Embrace Crypto

Meanwhile, Draper urged the SEC to discard the dark regulatory cloud evident in the United States and embrace digital innovation. The VC investor warned that the innovation will move abroad if the US fails to create an enabling environment for cryptocurrency.

Draper noted that cryptocurrencies should be treated as other assets. According to him, digital assets should have clear regulations like other asset classes if they are genuinely considered currencies.

Meanwhile, the venture capitalist investor stated that the ill-regulation of cryptocurrencies would cost the SEC chair, Gary Gensler, his job. In the interview, Draper noted that Gensler has mismanaged the crypto sector, and it would lead to his removal. 

Notably, Draper is not alone in his assertions of Gensler’s removal. Key crypto players like Ripple boss Brad Garlinghouse and SkyBridge managing partner Anthony Scaramucci have noted that the SEC chair will be out of the job regardless of the outcome of the November election.

Nevertheless, the November US election has been tipped to substantially impact the Bitcoin price. Notably, the crypto sector has become a major topic in the election, with both Republican and Democrat candidates teasing their embrace of the industry and providing clear regulations.

While a few analysts have speculated that Bitcoin will fall substantially if Vice President Kamala Harris wins and surge if Donald Trump wins, some industry leaders believe that the sector will thrive regardless of who becomes the next president.